CIGNA Cash Balance Conversion Suit Certified as Class
Action

According to a Hartford Courant news report, the ruling
from US District Judge Dominic Squatrito means that 10,000
current and former CIGNA workers could become part of the
December 2001 lawsuit. The lead plaintiff is Janice C.
Amara, who works in CIGNA’s Retirement & Investment
Services division in Hartford.

The suit centers on CIGNA’s January 1998 cash balance
conversion. Plaintiffs’ attorneys say CIGNA’s conversion
discriminated against older employees in the rate at which
future benefits are earned.

the cash balance plan forced employees to give up
previously earned early retirement benefits in order to
receive future contributions

CIGNA did not inform employees, as required by
law, about the disadvantages posed by the pension
plan.

CIGNA insists it did nothing wrong, the Courant said.
Spokesman Wendell Potter told the newspaper: “We believe we
acted properly and in the best interest of our employees,
and we expect we will prevail.”

In a traditional plan, benefits are based on formulas that
multiply the number of years worked by a percentage of a
worker’s highest average salary – typically paid during the
final years of employment.
In cash balance plans, which have raised protests at
many companies, the employer contributes a fixed percentage
of a worker’s annual pay to a cash-balance account.